* Secondary bond turnover surged 155.6% to ZMW11.5 billion while equity turnover plunged 80.1% to ZMW113.4 million in June, marking a decisive shift in capital allocation.
* The LuSE All Share Index gained 0.73% despite the collapse in equity trading, leaving market performance driven by a much smaller pool of active capital.
* Retail participation continued to strengthen as LuSE Mobile App registrations rose 7.5%, expanding the exchange’s domestic investor base.

Harare- Capital shifted decisively towards Zambia’s bond market in June as investors concentrated liquidity in fixed income securities while participation on the equity market weakened sharply. The month’s defining development was not the movement of share prices but the relocation of investable capital, with bonds attracting substantially greater trading activity than listed equities.

The June figures established a clear conclusion. Zambia’s bond market has become the primary destination for tradable capital while the equity market is increasingly competing for liquidity. The immediate implication extends beyond June performance. Companies seeking to raise capital, fund managers allocating portfolios and investors assessing market opportunities now operate in an environment where fixed income commands a larger share of market activity.

Secondary bond turnover rose 155.6% to ZMW11.5 billion from ZMW4.5 billion in May. Equity turnover declined 80.1% to ZMW113.4 million from ZMW571.0 million during the same period. The market therefore absorbed an additional ZMW7.0 billion in bond trading while equity activity contracted by ZMW457.6 million.

The LuSE All Share Index advanced 0.73% to close at 25,784.88 points. The gain demonstrated that prices continued to rise despite the significant decline in market participation. For investors, this places greater emphasis on liquidity alongside valuation because the ability to deploy and recover capital becomes increasingly important when trading activity narrows.

The market also produced sharply different returns depending on the investor’s reporting currency. The All Share Index remained down 0.44% in Kwacha terms while delivering a 20.04% return in United States dollar terms. The appreciation of the Kwacha strengthened foreign currency returns and improved the relative attractiveness of Zambian assets for offshore investors.

Several listed companies continued to record notable share price appreciation. Zambia Forestry and Forest Industries Corporation gained 38.71%, DC Zambia advanced 32.38% and CEC Africa added 13.33%. These performances demonstrate that opportunities remain available for stock selection even as overall market liquidity contracts.

Retail participation continued to expand. Registered LuSE Mobile App users increased by 3,445 during June to reach 49,611, representing monthly growth of 7.5%. The expanding retail investor base strengthens the long term capacity of the exchange to deepen domestic participation. The next measure of progress will be the conversion of new registrations into regular trading activity that broadens market liquidity.

Corporate activity continued to support market development. Airtel Networks Zambia became only the fourth listed company on the exchange to exceed a market capitalisation of US$1 billion, reinforcing the exchange’s ability to host large capitalised businesses. Zambia Forestry and Forest Industries Corporation also announced plans for a rights issue, providing an important test of investor appetite for new equity issuance while fixed income continues to attract a greater share of market liquidity.

June’s trading patterns point to a market where capital allocation decisions are increasingly shaped by liquidity and income opportunities. The next reporting season will determine whether stronger corporate earnings restore participation in equities or whether institutional capital continues to favour fixed income instruments. Until trading activity broadens, liquidity will remain as important as valuation in determining the competitiveness of Zambia’s equity market.

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